There’s Movement On Budget Stalemate, As Special Session Opens Monday

State Sen. John Braun (R-20) unveiled a new Senate Republican budget proposal Friday. Lawmakers are in an overtime session to settle the 2016 supplemental state budget. Photo: Washington State Senate Republicans.

Introduced Friday on the first day of an overtime session, Washington State Senate Republicans’ new supplemental budget proposal includes $145 million more in spending than their first offer earlier this year. When the House meets Monday, Democratic Majority leaders will discuss whether to accept the bump up, or bargain for more. Meanwhile, some Democrats were encouraged by the GOP movement on the budget, but questioned the timing.

Ranking Member Sen. Jim Hargrove (D-24) said during a Friday hearing he was “quite pleased” with the changes. He added, “I just wished we would have had this offer Wednesday and maybe we wouldn’t be here,” he said. “We would actually be done.”

Ranking Minority Member Sen. Kevin Ranker (D-40) also expressed his belief that real progress was being made, but the Democratic caucus still had concerns over things such as the lack of funding for homeless programs. “It would have been good if we had had this a few days ago,” he said.

Late last week, House Majority Leader Pat Sullivan (D-47), said, “Our goal is to get done as quickly as we can,” hopefully in two or three days. He added then that top priorities for House Democrats include “small, incremental investments” in mental health, homelessness and education. Friday, he was among Democrats criticizing the GOP for holding back their counter-proposal until overtime started.

New Senate Budget Finds More Money

Introduced by Ways and Means Vice Chair Sen. John Braun (R-20), the new Senate budget bill PSSB 6667 calls off the Senate’s plan to merge the Teachers’ Retirement System and the LEOFF retirement system for Law Enforcement Officers and Fire Fighters. The pension merger would have saved an estimated $75 million for the biennium.

In a prepared statement, Braun, Vice Chair of the Senate Ways and Means Committee, said “Recognizing we’re in divided government the Senate will continue working with our House colleagues to find common ground, while addressing the needs and priorities of Washington residents. We’ve demonstrated we can address emergencies like last year’s wildfires and improve mental health treatment and care, while maintaining a sustainable spending plan that complies with our four-year balanced budget.”

The Senate budget also backs off of their initial plan to shift $43 million from the mental health reserves with the Regional Support Network. Democrats criticized draining the reserves as an inappropriate way to cover spending instead of closing tax incentives as they have proposed.

Overall, PSSB 6667 increases Near General Fund and Opportunity Pathways spending by $178 million compared to the original $33 million proposed by the Senate.

Meeting Closer to The Middle

The House’s acceptable minimum in new spending may be scaling down as the Senate’s new spending ceiling is rising. The House had originally been seeking $467 million in new spending.

The new Senate supplemental budget aligns with the earlier House Democrat spending plan by drawing $190 million from the budget stabilization account or “rainy day fund” to pay for last year’s wildfires, instead of shifting $173 million from the state’s General Fund to the Disaster Response Account.

But on the two main issues, new taxes and non-emergency spending from the rainy day fund, the new Senate proposal doesn’t budge. In addition to $190 million for the wildfires, House Democrats’ supplemental budget had included another $277 million to pay for homelessness programs ($38 million), the local levy cliff stabilization ($90 million) and K-12 school construction ($149 million).

State Rep. Matt Manweller (R-13) said he anticipates resistance to any spending cuts.

However, State Rep. Larry Springer (D-45) said that budget negotiations weren’t that far away from an agreement on the last day of the regular session.

“Usually that last five million dollars is the worst,” he said.

Rainy Day Funds Have Been At Issue

The use of budget stabilization funds to address non-emergency matters has been one of the main disputes of the session.

Senate Republicans are determined to preserve the rainy day funds as much as possible. The new budget would leave $703 million worth at the end of the 2015-17 biennium and $1.1 billion at the end of the 2017-19 biennium.

They believe having a healthy budget stabilization account is crucial as state forecasts anticipate a $400 million shortfall in state revenue for 2017-19, the same budget cycle in which they must begin to substantively address the State Supreme Court’s McCleary ruling K-12 funding mandate deadline for 2018. The expected price tag for that is $3-4 billion.

Democrats in both houses have said that even though things like school construction haven’t been declared emergencies, it’s still smart planning. Hiring new teachers and then building the schools to accommodate them is putting the cart before the horse, they argue.